Empowering SMEs – Integrating SMEs into Global Supply Chain

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The SME initiative presents a ‘win-win’ opportunity for both India and the USA and enriches the global value chain to mutual advantage, encouraging companies to explore the competencies with the counterparts. Like in India, software and IT services, communication, agri business, precision engineering, food processing, entertainment, energy generation, social services including education and health are the priority sectors which can be tapped by US SMEs, said Shri Virbhadra Singh, Minister of Micro, Small and Medium Enterprises at the 7th Indo-US Economic Summit held here to chart out newer areas of cooperation with a specific focus on small and medium enterprises.

The Minister further added that SMEs in developing countries face a range of obstacles that make it difficult for them to move up in a value chain. He said, “Indian Government has recognized that empowering SME entrepreneurs is essential for achieving the goals of sustainable development and the bottlenecks hindering the growth must be eradicated to entitle full participation in the business. Adequate training programmes information dissemination, mentoring, trade fairs and exhibitions can be important sources of entrepreneurial development. As a result, the desired outcomes of the business are quickly achieved and more of remunerative business opportunities are found. As Indian economy is getting more and more globalised, SMEs are getting more and more actively involved in economic activities along the global value chain, especially in the export sector.

“With a view to build the capacity of the Indian Micro, Small and Medium Manufacturing Enterprises for overcoming competition in the global markets and facing challenges being posed by the entry of the multi- nationals in the domestic markets, the Government of India has announced the National manufacturing Competitiveness programme (NMCP). The objective of NMCP, which can be truly regarded, as ‘National Strategy for Manufacturing’ is to ensure healthy growth of the SME sector. The 10 components of the programme dealing with the firm level competitiveness against global challenges are being implemented in Public Private Partnership (PPP) mode. The 10 components of NMCP address the entire gamut of manufacturing in the sector. Beside NMCP, the MSME Ministry has taken several initiatives for the growth and development of the SME sector including two major credit-related schemes, namely, Credit Linked Capital Subsidy Scheme and Credit Guarantee Scheme.

“Increasing participation in global value chains through collective action and co-operation by

• Supporting the establishment through cluster formation
• Facilitating SME consortia jointly to bid produce and market, particularly in relation to government procurement programmes.
• Helping SMEs to develop their negotiating capacities and skills with MNEs through institutional support (awareness building) and training measures.
• Facilitating supplier development programmes, where SMEs are coached and mentored in key areas such as design and production engineering.
“The SME sector can achieve great heights by ushering innovation, competitiveness and sustainability. Unlike many developed economies SMEs are well defined in India and their spectrum is quite wide. This sector plays an important role in the growth of economy.

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